The Fund posted a total return of 12.13% for the quarter, compared with 10.61% for the Funds benchmark, the S&P 500® Index. Stock selection, particularly in the consumer discretionary sector, boosted Fund returns. In health care, the only underperforming sector this quarter, stock selection proved less effective as modest underweights to select biotechnology companies dragged down performance. Our sector weightings had no material effect on relative performance.
We believe the outlook for risk-taking continues to improve. Last year's halting economic recovery translated into a more cautious outlook, but recent economic news continues to be more positive. Despite periodic flights-to-quality, growth has reasserted itself again. We view this shift in market leadership as a positive sign for continued market growth and investor attention to company fundamentals throughout the course of 2013.
If you're seeking a low cost, disciplined approach to investing in equities, this fund may be appropriate for you. It seeks long term growth of capital and dividend income and invests primarily in a broadly diversified portfolio of established, large-cap companies. The Fund is intended for use as a core equity investment.
- Use a multi-factor proprietary quantitative stock selection model with the goal of providing additional total return versus the S&P 500® Index.
- Create a portfolio with risk, style, capitalization and characteristics similar to the S&P 500® Index while potentially providing excess returns by overweighting or underweighting stocks that have the potential to achieve the Fund's objective.
- Sell securities when they are no longer attractive based upon evaluation criteria, such as valuation, price momentum and earnings quality.